PGNiG Upstream Norway concluded an agreement with Norske Shell, as a result of which it will acquire shares in the Kvitebjørn and Valemon production fields in the Northern Sea. Thanks to the transaction, the gas production in Norway of the PGNiG’s capital will increase to 0.9 billion cubic meters in 2021, so it will be approx. 30 percent greater than assumed in previous forecasts.
Gas extracted from these fields, together with the volumes resulting from the previous acquisitions carried out by the Norwegian company PGNiG in the period 2017-2020, will be shipped to Poland after the Baltic Pipe gas pipeline is put into operation.
- This is our next transaction on the Norwegian Shelf, which is the consistent implementation of the strategy of the PGNiG Group. It serves the diversification of gas supplies and improves Poland's energy security based on our own resources. As in the case of an earlier transaction this year, where we increased our involvement in the Gina Krog field, and this acquisition will translate into immediate and significant increase in gas production by our company at the Norwegian Continental Shelf, which will have a positive impact on the operative results of the PGNiG - said Jerzy Kwieciński, President of the Management Board of PGNiG SA, exclusive owner of PGNiG Upstream Norway.
As a result of the transaction, PGNiG Upstream Norway (PUN) will become, as a concession partner, the owner of 6.45 percent shares in the Kvitebjørn field and 3.225 percent in the Valemon field. In addition, the company will acquire shares in the infrastructure used for transport of hydrocarbons extracted from these deposits. PUN estimates that thanks to the transaction the average daily production of hydrocarbons - oil and gas in total - by the company will jump by approx. 30 percent.
Both newly purchased fields are dominated by natural gas resources. Planning gas production from these fields in 2020, equivalent to those purchased from Shell shares, accounts for approximately 70 percent of PUN's current production in Norway. Hence, the transaction will allow the company to immediately increase its own gas production - in 2021 it will be almost 30 percent higher than previously assumed in forecasts and about 80 percent higher than the gas production by PUN in 2019. According to the company's estimates, in 2023-2028, so after the Baltic Pipe gas pipeline is launched, both fields will provide the company with approximately 0.2 billion cubic meters of gas annually.